Exam 15: Administrative Procedures

Terry files his return on March 31.The return shows taxes of $6,000,and Terry pays this entire amount when he files his return.By what time must he file a claim of refund?

On July 25 of the following year,Joy files her current calendar-year tax return without having requested an extension.On October 8,she pays the amount due.The tax shown on her return is $25,000.Her current-year withholding tax is $20,000.Joy pays no estimated taxes and does not claim any tax credits on her current-year return.Assume she did not commit fraud.Will Joy owe interest,and if so,on what amount and for how many days?

On August 13 of the following year,Joy files her current calendar-year tax return and pays the amount due without having requested an extension.The tax shown on her return is $25,000.Her current-year withholding tax is $15,000.Joy pays no estimated taxes and does not claim any tax credits on her current-year return.Calculate the penalties that the IRS is likely to assess.Ignore the penalty for underpayment of estimated taxes.Assume she did not commit fraud.

Identify which of the following statements is true.

Which of the following statements regarding Circular 230 is false?

The Internal Revenue Service is part of the

Christie and Billy jointly file this year.Billy intentionally omits $5,000 in gambling winnings.Christie fraudulently deducts $1,000 in business expenses.The IRS audits the return,assesses a $2,500 deficiency and begins collection efforts two years after the timely filing of the return.Christie and Billy divorced one year before the deficiency was assessed.Can Christie receive any tax relief from the full $2,500 deficiency?

Latka Novatny gave you the following information to use in the preparation of his current year's tax return: In addition,he received $40,000 from a relative for whom he had worked previously.You have researched whether the $40,000 should be classified as a gift or compensation and are confident that substantial authority exists for classifying it as a gift.What tax compliance issues should you consider in deciding whether to report or exclude the $40,000?

You are preparing the tax return for Agre Corporation,which has sales of $50 million.Agre made a $2 million expenditure for which the appropriate tax treatment,deductible or capitalizable,is a gray area.The corporation's Chief Financial Officer wants you to deduct the expenditure.What tax compliance issues should you consider in deciding whether to deduct the expenditure?

Gerald requests an extension for filing his last year's individual income tax return.His tax liability is $10,000,of which $8,000 was withheld,leaving a balance due of $2,000 when he files on August 1 of the current year.His penalty for failure to pay the tax on time is

Identify which of the following statements is true.

Identify which of the following statements is false.

Tax return preparers can be penalized for the following activities except

Identify which of the following statements is true.

A taxpayer can automatically escape the penalty for underpayment of taxes by

In order to appeal to the Appeals Division,a taxpayer must submit a protest letter to the IRS

The court in which the taxpayer does not have to pay the tax and then litigate for a refund is the

For innocent spouse relief to apply,five conditions must be met.Explain them.

Identify which of the following statements is false.

Steve files his return on April 1 and pays the entire amount of tax for the year at that time,$5,000.He is audited and pays the deficiency of $1,500 two years later.The maximum amount Steve may file a claim for refund for eighteen months later is